Chapter 9 Creating Brand Equity
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Chapter 9 Creating Brand Equity

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Chapter 9 Creating Brand Equity Chapter 9 Creating Brand Equity Presentation Transcript

  • Part 4 : Building Strong Brands Chapter 9 – Creating Brand Equity
  • What is Brand Equity
    • A brand is a name, term, sign, symbol, or design, or some combination of these elements, intended to identify the goods and services of one seller and to differentiate them from those of competitors.
    • As consumers’ lives become more complicated, rushed, and time-starved, the ability of a brand to simplify decision making and reduce risk is invaluable
    • The key to branding is that consumers must not think that all brands in the category are the same
  • What is Brand Equity
    • Brand equity is the added value endowed to the products and services. This value may be reflected in how consumers think, feel and act with respect to the brand as well as the prices, market share, and profitability that the brand commands for the firm
    • The extent to which customers are willing to pay more for the particular brand is a measure of brand equity
    • Customer-based brand equity can be defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand. If positively, consumer react favorably to the product and the way it is marketed. If negatively, consumer react less favorably
    • Thus, the management of brand equity will make longer loyal customer lifetime value
  • Brand Equity Models
    • David Aaker views brand equity as : brand awareness, brand associations, perceived quality, brand loyalty and other proprietary asset such as patents, trademarks, and channel relationship
    • BRANDZ model of brand strength involves a sequential series of steps:
    • Presence : Do I know about it?
    • Relevance : Does it offer me something?
    • Performance : Can it deliver?
    • Advantage : Does it offer something better than others?
    • Bonding : Nothing else beats it
  • Building Brand Equity
    • Marketers build brand equity by creating the right brand knowledge structures with the right consumers.
    • Building brand equity depends three main factors:
    • The initial choices for the brand elements or identities making up the brand (e.g. brand name, logo, slogan, jingle, packages and spokespeople). There are six criteria in choosing brand elements as follows (the first three as “brand building” and the latter three as “defensive brand”):
    • Memorable: easily brand to recall and recognize, brand promise is true at consumption e.g. Aqua
    • Meaningful : brand element credible e.g. Top One Oil
    • Likeability: brand element inherently visually & verbally e.g. Marlboro man
    • Transferable: brand element to introduce new products in the same or different category e.g.Toyota Avanza & Lexus
    • Adaptable: brand element is never old e.g. Teh Sari Wangi
    • Protectible: brand element is legally protectible e.g. Intel Incorporation
  • Building Brand Equity
    • Designing Holistic Marketing Activities: the way the brand is integrated into the marketing activities through:
    • personalizing marketing: the brand and its marketing are no identical for two customers
    • integrating marketing: variety marketing mix (4 P’s) for different marketing activities
    • Internalization: all employees have an up-to-date, deep understanding of the brand and its promise
    • The associations indirectly transferred to the brand to some other entity e.g. The Company: “Not just Visa, Citibank Visa”. Country of Origin: “Sony Electronics from Japan”. Spokespeople: “Tukul Arwana for Empat Mata”. Events: “Yamaha Motor GP Formula 1”. Channel of distribution: “Amazon.com”
  • Measuring Brand Equity
    • Two general approaches to fully understand the sources of brand equity and how they affect outcomes of interest :
    • Brand audits are in-depth examinations of the health of a brand and can be used to set strategic direction for the brand. Consist of brand inventory and brand exploratory
    • Tracking studies by collecting information from consumers on a routine basis overtime. This steps as a means of understanding where, how much, and in what ways brand value is being created
  • Managing Brand Equity
    • Effective brand management requires changing brand knowledge, as a long-term view and will enhance customer-based brand equity. These steps are:
    • Brand Reinforcement : marketing actions that consistently convey the meaning of the brand to consumers in terms of what core benefits & needs it satisfies; how superior and unique brand association
    • Brand Revitalization : marketers must turn around the impressive of brand e.g. negative associations become linked to the brand (apply the new positioning or new segment) or fail to deliver on brand promise (improving manufacturing process)
    • Brand Crisis : consumers see the response by the firm as both swift (the longer it takes a firm to response the more consumer can form negative impression) and sincere (the more sincere the response by the firm – public acknowledgement and steps to solve the crisis – the less consumer will form negative attributions
  • Devising a Brand Strategy
    • Brand portfolios takes place when multiple brands pursue multiple market segments. The reasons for introducing multiple brands:
    • To attract customers seeking variety
    • To increase internal competition
    • To yield economies of scale in advertising, sales and physical merchandising
    • To increase retailers’ shelf presence
    • Each brand name product must have a well-defined positioning so that brands can maximize coverage (no potential customers are ignored) and minimize overlap (cannibalizing among the brands)